Intelligent Tax Advisory System: A Chatbot with Simulation-Based Tax Policy Analysis

Taxation is an essential component of a country’s economic framework, yet for individual taxpayers it often becomes a complex and confusing process. In India, the presence of multiple tax slabs, exemptions, deductions, and the introduction of both the Old and New Tax Regimes have increased the difficulty of tax planning. Many taxpayers lack access to professional tax advisors due to high costs or limited availability, which often leads to incorrect tax filing or suboptimal financial decisions. This paper proposes an Intelligent Tax Advisory System that uses Artificial Intelligence (AI), Natural Language Processing (NLP), and simulation-based tax computation to provide automated, personalized, and user-friendly tax guidance. The system features an AI-powered chatbot that understands user queries in natural language and responds with accurate tax-related information. It allows users to simulate tax calculations under both Old and New Tax Regimes, compare tax liabilities, and identify the most beneficial option based on their income and deductions. Additionally, the system generates detailed tax reports and provides instant answers to frequently asked tax questions. Experimental evaluation shows that the proposed system improves accessibility, reduces dependency on manual consultation, and enhances decision-making efficiency. This solution aims to simplify tax planning, promote financial awareness, and support informed compliance among individual taxpayers.